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Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the company's estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos contaminated ceiling plaster in industrial buildings. The on-site supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums up his position in this way: "My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $2.80 to determine the bid price. Since our average cost is only $2.585 per square foot, that leaves enough cushion to take care of the additional costs of nonroutine work that shows up. Besides, it is difficult to know what is routine or not routine until you actually start tearing things apart." To shed light on this controversy, the company initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow: Activity cont Pool Activity Measure Total activity Removing asbestos Thousands of square feet 850 thousand square feet Estimating and job setup Number of jobs 400 Jobs Working on monroutine jobs Number of nonroutine jobs 100 nonroutine jobs Other (organization-sustaining costs and idle capacity costs) None Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine Jobs and routine jobs require estimating and setup Conta for the Year Wages and salaries Disposal fees Equipment depreciation On-site supplies office expenses Licensing and insurance Total cost $ 400,000 791,000 96,000 60,000 300,000 500.000 $ 2,147,000 Distribution of Resource Consumption Noroes Activities Estimating working on Removing and Job Nonroutine Asbestos Setup Joba Wages and salaries 600 200 Disposal toes 600 ON 405 Equipment depreciation 400 50 250 100 Other 104 00 308 Total 1001 1001 1009 Distribution of Resource Consumption Across Activitiell Estimating Working on Removing and Job Nonroutine Asbestos Setup Jobs Wages and salaries 600 101 200 Disposal fees 600 08 408 Equipment depreciation 405 50 256 On-site supplies 600 250 158 office expenses 100 358 258 Licensing and insurance 301 00 508 Other 108 08 308 08 301 200 Total 1000 100$ 1000 1005 1008 1000 Required: 1. Perform the first-stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of e following Jobs according to the activity-based costing system. a. A routine 1,000-square-foot asbestos removal job: b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A to 30 Perform the first stage allocation of costs to the activity cost pools. Estimating and Job Setup Removing asbestos Working on Nonroutine Jobs Other Total Wages and salaries Disposal fees Equipment depreciation On-site supplies 2. Compute the activity rates for the activity cost poois. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet o following jobs according to the activity-based costing system a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A to 30 Perform the first-stage allocation of costs to the activity cost pools. Other Working on Nonroutine Jobs Removing asbestos Total Estimating and Job Setup Wages and salaries Disposal fees Equipment depreciation On-site supplies Office expenses Licensing and insurance Total cost On-site supplies 601 250 158 00 1001 office expenses 109 350 250 300 1000 Licensing and insurance 301 03 500 200 1001 Required: 1. Perform the first stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity based costing system a. A routine 1,000-square-foot asbestos removal job, b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal Job. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Red 3A to 3 Compute the activity rates for the activity cost pools Activity Cost Pool Removing asbestos Estimating and job setup Working on nonroutine jobs Activity Rate per thousand square feet per job per nonroutine job 2. compute tne activity rates for the activity cost pools. 3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system a. A routine 1,000-square-foot asbestos removaljob. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job, Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A to 30 Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system. (Round the "Average cost per thousand square feet" to 2 decimal places.) a. A routine 1,000-square-foot asbestos removal job. b. A routine 2,000-square-foot asbestos removal job. c. A nonroutine 2,000-square-foot asbestos removal job. Show less Routine 1,000 Routine 2,000 square feet job square feet job Nonroutine 2,000 square feet job Total cost of the job Average Cost per thousand square feet